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The Oregon Administrative Rules contain OARs filed through January 15, 2016
 
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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 690

LONG-TERM RURAL ENTERPRISE ZONE INCENTIVES

NOTE: Department of Revenue forms referenced in this division are available from the Department of Revenue, Property Tax Division, 955 Center St NE, PO Box 14380, Salem OR 97309-5075, phone 503-378-4988, 800-356-4222, TTY 800-886-7204, fax 503-945-8737, and web http://www.oregon.gov/DOR/PTD/enterform.shtml

123-690-0001

Purpose and Scope

This division of administrative rules specifies the effect of provisions under ORS 285C.400 to 285C.420, 317.124 and 317.131. As such, these administrative rules:

(1) Address determinations, procedures and requirements of the up to 15 years of exemption from property taxes and of corporate excise tax credits for a facility inside a rural enterprise zone in a county experiencing particular economic hardship.

(2) Do not control or bind the county assessor or Department of Revenue, and they do not supersede OAR chapter 150, in matters related to tax administration.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400 - 285C.420 & 317.124 & 317.131
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-0100

Terminology

OAR 123-001 (Procedural Rules) contains definitions that are used in this division of administrative rules, unless the context dictates otherwise. In addition:

(1) “Facility Site” means a location consisting of one or more parcels of land and buildings that:

(a) Contain the ‘facility,’ as used in ORS 285C.400(4), and all (but not only) property of a certified business firm subject to an exemption under ORS 285C.409; and

(b) Are contiguous or have comparable proximity to each other, inside the boundary of a single rural enterprise zone, although it may also include one or more ancillary locations of interrelated investment and operations inside the same zone that are specifically identified as such in the agreement under ORS 285C.403(3)(c) between the business firm and the zone sponsor.

(2) “In service” has the meaning described in OAR 150-285C.409, or the one used in ORS 285C.050 in the absence of an applicable permit requirement.

(3) “Sponsor” or “zone sponsor” has the same meaning as described in OAR 123-668, including but not limited to all of the zone’s cosponsors’ needing to jointly approve or exercise any and all actions under ORS 285C.400 to 285C.420.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400 - 285C.420 & 317.124 & 317.131
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-0500

Eligible Rural Enterprise Zones

In determining annually if a county meets the definition under ORS 285C.400(3) of a ‘county with chronically low income or chronic unemployment’:

(1) With on-line availability of revised/benchmarked annual unemployment rates for the previous year and other relevant data described in this rule, the Department shall analyze the data for all relevant prior years, ascertain which counties in the state satisfy the definition, identify existing rural enterprise zones in those counties, prepare information as appropriate, and post it on the Department web site for use by the public and business firms, as well as local zone managers and county assessors.

(2) The determination described in section (1) of this rule shall first take effect on July 1 next following on-line availability of the latest relevant annual data and shall apply until and including June 30 of the next calendar year. A correct, prior determination in accordance with this rule is not subject to retroactive change due to revisions in future years, but if during an annual data cycle, the Department learns of a significant revision or correction to relevant data, the Department will review the data to determine whether they alter the status of any county, and for any consequent change to the currently identified counties:

(a) The effective date of the change is the first day of the second month following the month in which the revised or corrected data were formally released; and

(b) The Department will notify affected county assessors and local zone managers and revise information materials, accordingly.

(3) A county is a ‘county with chronically low income or chronic unemployment’ if subsection (a), (b) or (c) of this section is true:

(a) The median derived per subsection (4)(c) of this rule for the most recent 10 or 20 consecutive years is at least 1.3 rounded to the nearest tenth, based on unemployment rates as described in subsection (4)(a) of this rule.

(b) The median derived per subsection (4)(c) of this rule for the most recent 10 consecutive years is equal to or less than 0.75 rounded to the nearest hundredth, based on per capita income levels as described in subsection (4)(b) of this rule.

(c) The county’s change in total population minus natural population change is equal to or less than negative one (-1), based on the most recent estimates available from the Portland State University Population Research Center, in comparison to the latest U.S. decennial census population count of not less than three years earlier.

(4) As used in ORS 285C.400(3):

(a) “Most recently revised annual average unemployment rate . . . available” means the estimated percent of the civilian labor force that is unemployed on average according to the Oregon Employment Department for each of the most recent calendar years available.

(b) “Most recently revised . . . annual per capita income levels available” means the average annual per capita personal income level as estimated and revised by the Bureau of Economic Analysis of the U.S. Department of Commerce for each of the most recent calendar years available.

(c) “Median ratio . . . of the county to the equivalent of the entire United States for each year” means the average for the two middlemost quotients that result from dividing the county figures described in subsection (a) or (b) of this section by each year’s corresponding national figure over 10 or 20 years.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400 & 285C.403
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

Local Approval of Facility Exemption

123-690-2000

Written Agreement

For purposes of the written agreement between a business firm and the sponsor of the rural enterprise zone under ORS 285C.403(3)(c) and (d):

(1) The agreement shall consist at a minimum of the following:

(a) Acknowledgment of the planned or pending application for certification under ORS 285C.403;

(b) Concise description of the firm’s proposed investments, Facility Site and workforce;

(c) Specification of the obligations that the proposed investments and workforce must satisfy under ORS 285C.412, which the agreement in no way supersedes;

(d) Identification of all the parties to the agreement and their representatives;

(e) Zone sponsor’s explicit approval for the firm to receive the exemption under ORS 285C.409 on qualifying facility property;

(f) The sponsor’s statement as to the number of consecutive tax years that will comprise the period of exemption beginning after facility property is placed in service, which is not less than 7 and not more than 15 years, but which is only seven years if the agreement is silent about the period of exemption. The agreement may also provide that the exemption period, at the election of the business firm or upon fulfillment of a certain local additional condition or criterion:

(A) Expires prematurely after at least seven years but before the stated number of years, such that the firm does not henceforth need to comply further with any statutory or local additional requirement; or

(B) Extends a certain number of years beyond the stated number of years, but not more than 15 years in total; and

(g) With respect to additional conditions or requirements by the zone sponsor under ORS 285C.403(2)(e) and (3)(c), either:

(A) Indication that the sponsor is not imposing or requesting any such condition or requirement; or

(B) Specification of any such condition or requirement, in accordance with OAR 123-668, including but not limited to standards and methods for demonstrating satisfaction of the condition or requirement, as well as consequences of noncompliance, such that the business firm expressly acknowledges when noncompliance shall result in retroactive disqualification of the exemption, termination of the remaining exemption period or an alternative consequence.

(2) The agreement may be:

(a) Part of a broader accord involving parties other than the business firm and the sponsor, insofar as the accord still conforms to section (1) of this rule.

(b) Preapproved or subsequently authorized by resolution or by other means of the zone sponsor, or of each cosponsor, consistent with OAR 123-668-2400.

(3) An authorized representative or representatives of the business firm and of the zone sponsor must execute the agreement:

(a) On or after the effective date on which:

(A) The zone is designated or some or all of the Facility Site is amended into the zone through a change in the boundary of the zone; and

(B) The county containing the Facility Site is determined to meet the definition under ORS 285C.400(3) consistent with OAR 123-690-0500; and

(b) Effectively before:

(A) The zone has terminated; or

(B) The county is not subject to a positive determination as described in paragraph (a)(B) of this section.

(4) The sponsor shall provide a copy of the signed and dated written agreement to the Department, which shall review the agreement, and if the following are accurate, the Department shall issue a letter for attachment to the written agreement confirming that:

(a) On the date of its execution it effectively satisfied section (3) of this rule, and one party to the agreement is the sponsor of the rural enterprise zone; and

(b) The agreement appears to satisfy section (1) of this rule.

(5) Following the effective date of the enterprise zone’s termination, the agreement may not be substantially modified, replaced, amended, supplemented or terminated.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403, 285C.406 & 285C409
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-2100

Requisite County/City Resolutions

For purposes of resolutions adopted under ORS 285C.403(3)(a):

(1) A requirement for certification is the adoption of a resolution expressly approving the exemption of facility property by the county and by any city in which the Facility Site is located, as follows:

(a) Both the county and the city must adopt such a resolution if any part of the Facility Site is located in incorporated territory, but only the county must adopt such a resolution if the Facility Site is located entirely in unincorporated territory.

(b) Authorization or approval of a written agreement described in OAR 123-690-2000 by formal resolution of the governing body of a city or county sponsor of the zone automatically fulfills this requirement for that city or county, as the case may be.

(c) If the county or city does not sponsor the zone, it may nevertheless be a party to the written agreement in accordance with OAR 123-690-2000(2), but the necessity of a formal resolution remains.

(2) Adoption may occur at any time irrespective of when the agreement is executed or of an effective date in OAR 123-690-2000(3) for the sake of then certifying the business firm. If, however, the resolution also substantially implements all or part of the agreement by the zone sponsor, as opposed to merely authorizing or endorsing execution of an otherwise operable agreement, its adoption must occur after the agreement’s execution and before the zone terminates.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-2300

Applying for Certification

For purposes of the application for certification under ORS 285C.403(1) and (2):

(1) In order for a business firm to receive the exemption on facility property under ORS 285C.409:

(a) The firm must do the following before hiring new employees at the Facility Site and before commencing any physical work, as described in OAR 123-690-4000(1)(a), on property that would be subject to the exemption:

(A) Fill out the latest revision of the Department of Revenue form 150-310-073, Certification Application: Long-Term Rural Oregon Tax Incentive, as completely as the firm is capable of doing;

(B) Have the form signed and dated by the owner or authorized representative of the firm; and

(C) Submit a signed original of the form to either the local zone manager representing the sponsor of the enterprise zone or the county assessor of the county in which the Facility Site is located, and an executed copy to the other.

(b) Submission of the application form as described in subsection (a) of this section must occur before the effective date of the rural enterprise zone’s termination.

(2) Submission of the application form may occur before or after any relevant resolution, commitment, written agreement or effective date of determination that the county meets the definition under ORS 285C.400(3).

(3) Estimated numbers, anticipated dates or other expectations as indicated in the application form are not binding. The business firm shall base them on the best and most current information available to it at the time and shall inform the local zone manager and county assessor in writing of any significant changes to such expectations.

(4) The commitments made by the business firm (as required in the application form or otherwise during the certification process) shall be accepted at face value for purposes of certifying the firm, but such a commitment shall not relieve the firm of actually needing to meet any applicable requirement under ORS 285C.400 to 285C.420 and 307.124.

[Forms: Forms referenced are available from the agency]

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-2400

Certification

For purposes of ORS 285C.403(3) to (6), following submission of the application for certification as described in OAR 123-690-2300:

(1) The signatures of the local zone manager and county assessor approving the certification application are not valid if either one occurs:

(a) After any facility property subject to the exemption under ORS 285C.409(1) has been placed in service;

(b) After the operational sunset date prescribed under ORS 285C.406(2)(a); or

(c) Before any of the following (unless formally reaffirmed afterwards):

(A) The commitments by the firm in the application to meet requirements under ORS 285C.412;

(B) The relevant written agreement and the corresponding letter of confirmation by the Department as described in OAR 123-690-2000;

(C) Any resolution by the sponsor or a cosponsor of the zone that authorizes or effects the written agreement in paragraph (B) of this subsection; or

(D) The requisite resolution or resolutions under ORS 285C.403(3)(a) by the county/city in which the Facility Site is located.

(2) Approval of the certification application may occur after:

(a) The effective date of the termination of the enterprise zone; or

(b) Commencement of applicable hiring or physical work on exempt facility property.

(3) Except as qualified in this rule and OAR 123-690-5200(2)(a), the local zone manager and the county assessor shall approve the certification application upon satisfaction of the criteria under ORS 285C.403(3), at which point:

(a) The business firm is “certified,” such that it is eligible for any of the exemptions under ORS 285C.409(1); and

(b) The zone manager and assessor shall send copies of the signed original certification application form with all relevant attachments to the firm, the Department and the Department of Revenue.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403, 285C.406, 285C.409 & 285C.412
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

Mandatory Requirements: Investment, Hiring, Compensation

123-690-4000

Minimum Investment and Exempt Property

For purposes of the required minimum investment under ORS 285C.412(1)(a), (2)(a), (3)(a), (4)(b) or (5)(a) in property that is owned or leased by a certified business firm and located at the Facility Site:

(1) Subject to section (2) of this rule, the following costs count toward the minimum investment:

(a) Construction, reconstruction, modification, refurbishing, reconditioning, retrofitting, upgrading and installations that commence after the application for certification, including but not limited to the costs of materials, supplies, labor, building contractors, engineering, physical connections to utilities, on-site development or site preparation; or

(b) Property acquired or moved to the Facility Site after the application for certification. (Current fair market value substitutes for price if the property is not subject to a recent transaction, such as leased or newly transferred property in certain cases)

(2) Costs due to activities or actions described in section (1) of this rule count toward the minimum investment only if incurred for:

(a) The following types of property or change in property value, which would be subject to exemption under ORS 285C.409:

(A) One or more newly constructed buildings or structures;

(B) Additions or modifications to any previously constructed or occupied building or structure; and

(C) Newly installed or newly upgraded, reconditioned, refurbished or retrofitted real property machinery & equipment or personal property, whether or not it is inside or on a building or structure described in this subsection, including non-inventory supplies, spare parts or otherwise taxable vehicles operated within the confines of the Facility Site.

(b) Land, improvements to the land, or the existing value of any property already at the Facility Site, notwithstanding that under ORS 285C.409(5) it is not subject to exemption.

(c) Property leased by the firm and described in subsection (a) or (b) of this section, which in the case of subsection-(a) property or property value may be exempt only if the firm is fully responsible for any ad valorem tax through explicit provisions of a lease agreement.

(d) Any whole category of property as otherwise described in subsection (a) or (c) of this section, even though the certified business firm, in first claiming an exemption under ORS 285C.409(1)(a) or (c), formally and irreversibly elects to exclude it from any further exemption, including but not limited to an exclusion made pursuant to the agreement under ORS 285C.403(3)(c) with the zone sponsor.

(3) Regardless of their association with the Facility Site or exemption under ORS 285C.409, the following do not count toward the minimum investment:

(a) Cost of financing (including but not limited to debt service), legal fees (except as necessary in obtaining government permission for facility development), ongoing management and maintenance, and similar expenses;

(b) Cost or value of property that at the time of the application for certification is already owned or leased by the firm and located at the Facility Site;

(c) Cost or value of inventory, including but not limited to raw materials or work in progress; or

(d) Any vehicle or device pulled, pushed or carried by a vehicle that is designed to hold and transport people, goods or property beyond the Facility Site, including but not limited to aircraft, barges, carriages, railcars, trailers, trucks or ships (which are also not exemptible in any case); or

(e) Expenses associated with activities or actions described in section (1) of this rule that are incurred only after the calendar year in which exempt facility property is first placed in service, although the property associated with those activities or actions may be exempt for the remainder of the period under ORS 285C.409(1)(c).

(4) The firm shall provide notice to the assessor in writing as soon as possible after satisfaction of this requirement is verifiable, to be documented through existing project expense records or retrospective compilation of evidence as necessary or appropriate.

(5) In determining ‘real market value of all nonexempt taxable property in the county,’ as used in ORS 285C.412, the most recently available fiscal year of “Oregon Property Tax Statistics” (150-303-405) from the Department of Revenue at the time of certification shall be used.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-4200

Minimum Hiring

For purposes of the minimum hiring and employment requirements to be met and maintained under ORS 285C.412(1)(b), (2)(c), (3)(d), (4)(d) or (5)(c) by a certified business firm:

(1) Employees are persons:

(a) Working for the firm at the Facility Site more than 32 hours per week in an established, year-round position (as opposed to any form of averaging hours worked, such as full-time equivalency); and

(b) Whom the business firm, an affiliated company, or a third party fully charged with general facility operations:

(A) Employs under ORS chapter 316 respective to Oregon personal income tax withholding, contracts with or leases; or

(B) Directs on a daily basis and has significant control over personnel decisions, although an independent contractor employs the person to deliver or perform specific services at the Facility Site (as opposed, for example, to workers who are assigned at the discretion of a vendor or contractor).

(2) The number of employees located and performing their jobs at the Facility Site, less the base number of employees as calculated in sections (4) to (7) of this rule, must equal or exceed the applicable minimum under ORS 285C.412.

(3) The firm shall provide notice to the assessor in writing, with payroll records or other evidence as necessary or appropriate, as soon as possible after satisfaction of section (2) of this rule is achieved. This must occur in a calendar year that is not more than the applicable number of years set forth below after the calendar year in which exempt facility property is first placed in service:

(a) Five years for ORS 285C.412(1) or (4); or

(b) Three years for ORS 285C.412(2), (3) or (5).

(4) The base number of employees is one of the following figures, adjusted in accordance with sections (5) and (6) of this rule:

(a) The total number of employees working at the Facility Site on the date 12 months before the date that property subject to exemption under ORS 285C.409(1)(c) is first placed in service, if the agreement under ORS 285C.403(3)(c) with the zone sponsor does not otherwise stipulate; or

(b) As stipulated in the agreement, the total or annual average number of employees working at the Facility Site as of the date:

(A) The firm submitted its application for certification pursuant to OAR 123-690-2300;

(B) The application was fully approved and the firm certified pursuant OAR 123-690-2400; or

(C) Specified in the agreement, which may be after the date of application but not less than 12 months before the date property is first placed in service.

(5) The base number includes employees engaged in equivalent occupations/operations of the certified business firm or any other firm under common ownership or control that are transferred to the Facility Site from another location within this state that undergoes corresponding job losses, at any time after the application is made but before the end of the applicable calendar year in section (3) of this rule.

(6) The base number excludes current or former employees of the certified business firm who are transferred or rehired, and whose employment at the Facility Site is unrelated to the transfer of existing operations or occupations from elsewhere in this state.

(7) If so specified in the agreement under ORS 285C.403(3)(c) with the zone sponsor, the base number also excludes:

(a) Employment in excess of what is required on previously exempt investment(s) as described in OAR 123-690-6200(4).

(b) Employment located within the Facility Site but engaged in distinct operations and working in separate areas that are not involved with any property subject to the exemption under ORS 285C.409.

(c) Employment to be transferred to the Facility Site as described in section (5) of this rule, if the zone sponsor formally accepts the firm’s public assertion that the operations and jobs would be otherwise transferred somewhere outside this state but for the exemption, and:

(A) The existing location is within a governmental jurisdiction of the zone sponsor; or

(B) The Department concurs with the sponsor in the letter described in OAR 123-690-2000(4) for elsewhere in Oregon.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-4400

Minimum Distance from I–5

For purposes of the minimum distance from the Facility Site of a certified business firm to Interstate Highway 5 (I-5) under ORS 285C.412(3)(b) or (5)(b):

(1) Measure the distance as:

(a) A straight line; and

(b) The shortest possible gap between any part of the Facility Site and a point along the median of the highway, regardless if that point is in this state or offers access on/off the highway.

(2) Exclude any spur or bypass such as I-105 or I-205.

(3) Round distances to the nearest whole number, such that an applicable location must be effectively farther than 10.4 miles from I-5.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-4600

Minimum Average Annual Compensation

For purposes of the minimum average annual compensation to be met and maintained under ORS 285C.412(1)(c), (2)(b), (3)(c), (4)(c) or (5)(d) by a certified business firm:

(1) Compensation includes total calendar-year remuneration that is:

(a) In the form of wages, salary, bonuses, commissions, shift differential, overtime pay, profit-sharing, paid vacation, and associated fringe or financial benefits (whether taxable or not) such as life insurance, medical coverage or retirement plans, but excluding:

(A) Free meals, club membership or comparable workplace amenities;

(B) Payroll-based tax or cost mandated by federal, state or local law, such as worker’s compensation or unemployment insurance or the employer’s share under FICA; and

(C) Gratuities or tips.

(b) Paid to any employee located and performing work for the certified business firm at the Facility Site, consistent with OAR 123-690-4200(1), regardless of hours worked per week or the permanence or newness of the employee’s position, except if excluded by OAR 123-690-4200(7)(b).

(2) Actual compensation described in section (1) of this rule shall be annualized in the case of jobs at the Facility Site, in which the employee works less than 40 hours per week or for less than the entire calendar year, by dividing 1,820 by the hours of actual time worked on the job for the calendar year and multiplying that quotient by the employee’s actual compensation.

(3) The firm shall add all employees’ total annual compensation under section (1) or (2) of this rule, as applicable, and divide that sum by the number of applicable (annualized) employees or positions to derive average annual compensation.

(4) In a calendar year after the calendar year in which exempt facility property is first placed in service — but in or before the fifth such year — this computed average annual compensation must equal or exceed 1.5 times the most recently finalized average annual wage by the Oregon Employment Department for all industries or ownerships in the county containing the Facility Site.

(5) The firm shall provide notice to the assessor in writing as soon as possible after satisfaction of section (4) of this rule is achieved, with payroll records or other evidence as necessary or appropriate.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

Ongoing Compliance

123-690-5000

Maintaining Employment and Compensation

(1) After initial satisfaction of the minimum requirement for total employment or average annual compensation, until after the final calendar year of the exemption period, the applicable employment or average annual compensation of employees of the certified business firm at the Facility Site may not be less than the mandatory minimum level. Otherwise, the exemption is disqualified consistent with OAR 150-285C.420, including but not limited to the imposition of property taxes that would have been assessed against facility property for a year in the which such property was not yet in service but was exempt under ORS 285C.409(1)(a) and (b).

(2) The mandatory minimum level for average annual compensation of employees at the Facility Site remains fixed, regardless of how much:

(a) Such compensation initially exceeded the county’s applicable average annual wage level; or

(b) The county’s average annual wage subsequently changes during the exemption period.

(3) Notwithstanding section (1) of this rule, the applicable employment or average annual compensation of employees at the Facility Site may fall below the mandatory minimum level under certain extenuating circumstances, including but not limited to the following:

(a) A natural disaster, conflagration or the like substantially disrupting the relevant operations of the certified business firm;

(b) Six or more months of severe economic troubles or military conflict significantly affecting the United States and other major foreign economies or the certified business firm’s industry;

(c) Unforeseen coincidence of vacant positions at the Facility Site, such as the case in which employees die, quit or have been fired for cause; or

(d) Temporary curtailment in operations at the Facility Site lasting no longer than twelve months to undertake major repairs in response to mechanical breakdowns that are unusual and unexpected within normal engineering parameters and maintenance program for exempt facility property.

(4) For separate exemptions at two or more separate Facility Sites of the same certified business firm in the same enterprise zone, the zone sponsor may allow that employees, who work at and regularly move between sites, to be counted proportionally among the sites according to an explicated method for purposes of satisfying the respective requirements of each exemption.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412, 285C.415 & 285C.420
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-5200

Post-Certification Verification

Pursuant to certification as described in OAR 123-690-2400 for purposes of qualifying for and continuing to receive exemption under ORS 285C.409(1)(c):

(1) The firm shall submit in writing to the county assessor (and to the zone sponsor, Department or Department of Revenue) as requested, relevant, understandable documentation on the following:

(a) Property at the Facility Site as described in OAR 123-690-4000(2), including but not limited to the particulars of any leased property;

(b) The date on which facility property subject to exemption under ORS 285C.409(1) is fully permitted for occupancy/operations or is otherwise first placed in service; and

(c) The date on which and the method by which each applicable requirement under ORS 285C.412 is initially satisfied, including but not limited to the notice required to be sent to the county assessor under ORS 285C.415.

(2) For purposes of section (1) of this rule and ongoing compliance with applicable requirements under ORS 285C.412:

(a) The county assessor may agree with the business firm in writing regarding certain methods and mechanisms to be implemented by the firm, as a condition of the county assessor’s approval of the certification application.

(b) The written agreement under ORS 285C.403(3)(c) with the zone sponsor may (also) contain such provisions.

(3) Any lack of the arrangements described in section (2) of this rule does not relieve the business firm of its obligation to demonstrate compliance with and satisfaction of any applicable requirement, as the assessor or Department of Revenue may demand.

(4) The Department shall prepare a worksheet, which is:

(a) Available at the Department web site; and

(b) Hereby incorporated and made part of these administrative rules by reference, in order for business firms to readily report recent employment and compensation for purposes of ongoing compliance under ORS 285C.412.

(5) The zone sponsor may annually give notice to all certified business firms in its enterprise zone that they must fill out and return the worksheet (whether in the absence of, in addition to or as part of arrangements in section (2) of this rule), whereby:

(a) The sponsor shall specify a due date for its receipt of the worksheet, which shall be between April 1 and June 1 of each year but never less than 60 days after sending notice;

(b) If the sponsor’s notice also asks for additional information to corroborate the worksheet that a certified business provides with a good faith request that the information not be publicly released because of its sensitive, proprietary or similar nature, the sponsor may honor the request as otherwise allowed under ORS 192.502(4) or other applicable laws;

(c) The sponsor shall share copies of returned worksheets and corroborating information with the Department, the county assessor or other relevant officials, as appropriate and in accordance with subsection (b) of this section; and

(d) The sponsor shall report the failure by any business firm to fulfill this requirement to the Department and the county assessor.

(6) If a certified business firm fails to return a worksheet pursuant to section (5) of this rule, or if the zone sponsor strongly doubts the information reported in the worksheet and suspects noncompliance, the sponsor and county assessor may jointly demand by registered/certified mail that the firm substantiate its employment, compensation or other compliance issue under ORS 285C.412. If the firm does not respond within 60 days of such mailing, then the zone sponsor shall assume noncompliance under ORS 285.412, and the assessor may retroactively disqualify the exemption under ORS 285C.420.

(7) This rule does not pertain to any additional local condition or requirement, for which verification of compliance is solely the responsibility of the zone sponsor pursuant to arrangements in the agreement between the zone sponsor and the certified business firm under ORS 285C.403(3)(c), consistent with OAR 123-690-2000(1)(g).

[Publications: Publications referenced are available from the agency]

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.409, 285C.412, 285C.415 & 285C.420
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

Contingencies with Property Tax Exemption

123-690-6000

Other Enterprise Zone or Construction Exemptions

For purposes of the exemption under ORS 285C.409:

(1) An eligible business firm may seek and receive approval for authorization under ORS 285C.140 according to OAR 123-674, while applying for and being certified under ORS 285C.403, although the zone sponsor and business firm shall clarify and resolve the situation as soon as possible.

(2) However, any property exempted under ORS 285C.170 or 285C.175, whether in the same or another enterprise zone, may not concurrently or subsequently be exempt under any paragraph of ORS 285C.409(1), and exemption under ORS 285C.409(1)(a) or (b) could complicate the use of ORS 285C.175. Therefore, a certified business firm still contemplating either the exemption under ORS 285C.409(1)(c) or the one under ORS 285C.175 might best avail itself of the exemption under ORS 307.330 as applicable during construction at the Facility Site.

(3) This rule does not relieve a taxpayer of any requirement to timely file forms, evidence or notice with the county assessor for purposes of (or to reserve the taxpayer’s right to) an exemption on property under ORS 285C.170 or 307.330, as well as 285C.409.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.403, 285C.409 & 285C.420
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-6200

Subsequent Facility Site Investments

For property newly placed in service at the same Facility Site on or after the ‘assessment date’ of an ongoing exemption under ORS 285C.409(1)(c):

(1) Any such property may also receive the exemption but only for the remainder of the 7 to 15 tax years available, and neither additional operations nor the introduction of such property at the Facility Site shall lengthen or add to the ongoing period of exemption on that or any property at the Facility Site, except as addressed in OAR 123-690-6400.

(2) A certified business firm may receive another (potentially overlapping) period of exemption under ORS 285C.409(1) on such additional property constituting another facility under ORS 285C.400(4) at the same Facility Site, but only if independent of the respective actions and investments pertaining to the firm’s certification or qualification for any previously granted exemption, the firm again:

(a) Applies and receives approval for certification;

(b) Respectively undertakes additional operations at the Facility Site; and

(c) Satisfies the applicable requirements to qualify for the exemption, including but not limited to the firm’s having submitted the final notice under ORS 285C.415 to the county assessor of having timely met all applicable requirements under ORS 285C.412.

(3)(a) A business firm certified for another exemption on additional property, as described in subsections (2)(a) and (b) of this rule, may formally submit a formal request to the county assessor that the property revert to a preexisting exemption, and the assessor may treat the additional property as a part of that remaining period of exemption, as described in section (1) of this rule, but only if the request is made before:

(A) The end of that ongoing exemption’s final tax year; and

(B) Submission of the final notice described in subsection (2)(c) of this rule.

(b) Upon fulfillment of either paragraph (a)(A) or (B) of this section, without a preceding request to the county assessor, the additional property stays exempt until the end of its own period of exemption, subject to the operation of ORS 285C.420 (retroactive disqualification for failure to meet or maintain an applicable requirement).

(4) In the case of any subsequent exemption according to section (2) of this rule that begins within seven years after the first year of the most recent ongoing exemption under ORS 285C.409(1)(c), the agreement with the zone sponsor under ORS 285C.403(3)(c) may give the certified business firm credit for some or all of its existing employees at the Facility Site, who were hired in excess of minimum requirements for a previous, ongoing exemption, in meeting the newer exemption’s required hiring.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403, 285C.409 & 285C.412
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-6400

Multiple, Joint Facilities

For purposes of two or more exemptions under ORS 285C.409(1)(c) as provided under ORS 285C.412(4), for which exempt facility property in each case is first placed in service over not more than four consecutive calendar years:

(1) Not only may the exemption periods start in different years, but their lengths may also vary respective to each agreement between the zone sponsor and certified business firm under ORS 285C.403(3)(c).

(2) If involving different Facility Sites, including but not limited to inside the same enterprise zone, the number of employees shall be determined separately subject to any base number at each Facility Site, consistent with OAR 123-690-4200, before being combined for purposes of ORS 295C.412(4)(d).

(3) If at the same Facility Site, each exemption must pertain to distinct investments or operations, but a common base number of employees shall be used.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412
Hist.: OBDD 11-2015, f. & cert. ef. 10-5-15

Corporate Payroll Tax Credit

123-690-8000

Request for State Tax Credit

For purposes of approval for a business firm to receive the credit under ORS 317.124(3), to offset state corporate excise tax liabilities, unless otherwise directed by the Governor or by the Director:

(1) A request for the credit shall be formally submitted to the Director from an authorized executive of the corporation, preferably pursuant to relevant local approval and certification under ORS 285C.403.

(2) Official consideration of the request shall happen only after certification.

(3) The request must explicitly indicate:

(a) That the corporation is seeking gubernatorial approval;

(b) When it would expect to begin claiming such credits; and

(c) Any preferred length of time during for which credits may be claimable.

(4) The request shall contain the best possible information about the corporation’s future income and plans to use the credit, as necessary and appropriate to evaluate the impact and applicability of the tax credit, which may be in response to follow-up inquiry by the Department.

(5) The Director will forward the request to the Governor and may include a recommendation, and as warranted, the following:

(a) Background information and analysis about the corporation, the proposed facility, tax impacts, the local community and other relevant information; and

(b) Summary of consultations with other state agencies including but not limited to the Department of Revenue.

(6) Approval of the request may be conditioned on additional commitments by the corporation as contained in a formal agreement between the State and the business firm.

(7) Information received from the corporation as described in section (4) of this rule may be exempt from public release if otherwise allowed under ORS 192.502(17)(a) or other applicable laws.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 317.124
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-8100

Excise/income Tax Credit

(1) To be effective, the Governor’s approval of a corporate excise or income tax credit under ORS 317.124 may take the form of a letter, memo or similarly official document that:

(a) Names the corporation and refers to its facility that is subject to certification and exemption under ORS 285C.400 to 285C.420;

(b) Simply grants the tax credit, approves the corporation’s request or directs necessary action by State officials;

(c) Defines the number of years during which the tax credit may be claimed; and

(d) Is done and effective by the ultimate due date (including normal extensions) to file a tax return for the corporation’s fourth income/excise tax year, in which exempt facility property is in service.

(2) To claim the tax credit, certification must occur on or before the operational sunset date prescribed under ORS 285C.406(2)(b), and the certified business firm must:

(a) Own facility property exempt under ORS 285C.409 and not lease it from other than a commonly owned company; and

(b) Fill out the latest revision of the Department of Revenue form 150-102-043, Long-Term Enterprise Zone Facilities Credit, and submit it with the tax return for each applicable income/excise tax year of the corporation, starting no later than the final year prescribed under ORS 317.124(3)(a).

(3) For a certified business firm with two or more exemptions under ORS 285C.412(4), the Governor may approve the tax credit jointly for all such facilities and provide that the apportionment factor and tax credit threshold under ORS 317.124(6) and (7) apply collectively to those facilities.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 317.124
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

123-690-8500

Revenue Distribution to Local Zone Sponsor

(1) As indicated in OAR 123-668-1600, the sponsor of an enterprise zone containing exempt facility property owned by a corporation that claims the tax credit under ORS 317.124 might receive funds through the Department of Revenue from the Long Term Enterprise Zone Fund established under ORS 317.127.

(2) The sponsor’s receipt of such funds depends on:

(a) The qualifying taxpayer’s having claimed the credit;

(b) The taxpayer’s making applicable tax payments; and

(c) The deposit of such payments for distribution under ORS 317.129 and 317.131.

(3) As to amounts for distribution and the current state fiscal year:

(a) If they exceed the property taxes that relevant taxing districts would otherwise have received in the corresponding property tax year, but for exemption under ORS 285C.409, then that excess goes to the zone sponsor.

(b) If there is no relevant exemption under ORS 285C.409 in the corresponding property tax year, then the entire amount goes to the zone sponsor.

(4) For purposes of section (3) of this rule, the zone sponsor is responsible for making timely arrangements, so that it:

(a) Can receive distributed funds in a way that effectively ensures the Department of Revenue of having made payment to the zone sponsor (including but not limited to a joint mechanism among all cosponsors, or a deposit account administered by a single cosponsor on behalf of the entire zone sponsorship); and

(b) Satisfies applicable provisions of ORS Chapter 294 and other state or local laws with regard to collecting, holding and using such funds.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 317.131
Hist.: OBDD 29-2010, f. & cert. ef. 6-14-10; OBDD 11-2015, f. & cert. ef. 10-5-15

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